Simply Good Foods just topped first-quarter earnings estimates Thursday morning, but did report its first decline in more than two years despite hiking prices 8% in the fourth quarter. The Atkins food products maker met sales view. SMPL shares slipped in premarket trade.
The Denver-based nutrition-focused food company sells various low-carb snacks, protein bars and ready-to-go shakes under its Atkins and Quest brands.
Simply Good Foods has eight consecutive quarters of earnings and revenue growth. Earnings rose 2% and 24% in Q3 and Q4, respectively, after posting three quarters of gains in the mid 40% range. Meanwhile, revenue increases fell from 29% to 6% growth during the last three periods.
Simply Good Foods Earnings
Expectations: FactSet analysts expected a 4.6% dip in Simply Good Foods' earnings to 41 cents per share on a 7% revenue boost to $301 million.
Results: Simply Good Foods earnings edged down to 42 cents vs. 43 cents a year earlier. Revenue rose 7% to $300.9 million.
The company sees net sales rising slightly better than the long-term forecast of 4%-6% after predicting 4%-6% growth for fiscal 2023 after reporting Q4 earnings.
SMPL Stock
Simply Good shares dipped 2% before the open in Thursday's stock market trading. Shares rose nearly 2% on Wednesday to 38.20, moving back above the 50-day line.
SMPL stock has a 40.26 buy point for its cup-with-handle base. A strong move from the 50-day line could offer an early entry.
Simply Good Foods ranks 2nd in the Food-Confectionery Group according to the IBD Stock Checkup, trailing only Hershey.
Traders should remain cautious when considering entries around earnings, as unexpected results could cause a volatile swing for the shares. SMPL stock's current handle depth is roughly 7% from its Dec. 2 peak. A handle decline of 12% or greater would indicate it's time to wait for a better entry opportunity.
SMPL stock's relative strength rating is near highs. And it has an 80 RS Rating out of 99, indicating strong performance against its stock peers. Simply Good Foods has a near-perfect 92 EPS Rating. SMPL stock also has a healthy 87 Composite Rating, which combines a number of technical indicators into one score.
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